A limited liability company (LLC) is a type of legal entity that is commonly used by businesses as a form of organization. An LLC is created by filing the appropriate paperwork with the state in which the business is located.
An LLC is designed to provide the owners of the business with limited liability protection. This means that the personal assets of the owners are generally not at risk if the company faces financial difficulties or is sued. Instead, the liability of the owners is limited to the amount of their investment in the business.
An LLC can be owned by one or more individuals or other entities, such as corporations or other LLCs. The owners of an LLC are referred to as members, and the LLC is managed by either the members or a designated manager.
LLCs are a popular choice for small businesses because they are relatively easy to set up and provide the owners with liability protection. They also offer flexibility in terms of taxation, as they can be taxed as a pass-through entity or as a corporation, depending on the needs of the business.« Back to Glossary Index